The Office of Inspector General (OIG) is a part of the United States federal government charged with improving efficiency and combating waste, fraud, and abuse of Medicare and Medicaid spending and reimbursement. The Centers for Medicare and Medicaid Services [RN1] (CMS) is a division of the Department of Health and Human Services (HHS). Although the OIG’s resources are primarily focused on CMS, they are involved in over 100 departments within HHS. Anyone may submit a tip to the OIG when there is a concern of medical reimbursement fraud and abuse.
By the Numbers
As a part of their reimbursement oversight for CMS, the OIG publishes data briefs periodically. Recently, the OIG published a review of genetic testing ordering and reimbursement trends from 2016-2019. There are several conclusions from the data collected:
- There was a four-fold surge in Medicare reimbursement for genetic testing with about $1.41 billion reimbursed in 2019.
- There was a 2.3-fold growth in the number of genetic tests paid for by Medicare.
- Medicare-covered procedure codes increased by 161% to 310 in 2019.
- The average amount Medicare paid per person who had at least one genetic test performed rose by 75% ($889 in 2016 to $1,559 in 2019) and the number of genetic tests increased by 43%.
- There was an increase of almost 300% for labs that received over $1 million in Medicare payments per year.
- The number of healthcare providers ordering genetic testing more than doubled
Interestingly, these trends were observed prior to the COVID-19 pandemic. There are many reasons for the rapid expansion of the ordering, cost, and reimbursement rates of genetic testing. Factors impacting these trends may include increased patient demand for genetic testing, a better understanding of the molecular etiologies of disease, commercial lab investment, and a regulatory landscape that does not require FDA approval.
The human genome project was “completed” in 2003 and provided the foundation for the rapid expansion of genetic technologies, which has been translated to clinically available genetic tests. Additionally, the relative cost of genetic testing has dropped precipitously in the last decade, thus increasing its availability. One study published in 2018 estimated there were greater than 75,000 genetic tests available, with more than ten tests being launched per day by clinical labs. Hereditary cancer genetic tests ranked second only to prenatal genetic screening and testing. The sheer volume of genetic tests available likely contributes to all the trends observed by the OIG and is somewhat expected.
The introduction of direct to consumer (DTC) genetic testing has raised awareness among the public regarding the availability of genetic testing technology. As the name suggests, DTC tests are available to consumers which do not require the consultation of a healthcare provider. These tests may be ordered by a customer directly from the lab for cash payment and are not reimbursed by CMS. Indeed, in 2016, there were 246 DTC companies that offered online ordering for genetic testing. The purpose of testing was a mix of genetic ancestry, innocuous physical traits, genealogy, and “health-related” testing. The validity and accuracy of health-related DTC testing has been questioned in the literature. Yet the presence of DTC testing has likely had an impact, even indirectly, in the clinical genetic testing space.
A concern of the OIGs report is the potential for waste, fraud, and abuse for genetic testing reimbursement. The fragmented healthcare system in the United States is prone to excessive and repetitive ordering of the same test for a patient. This is especially true if a patient changes healthcare providers or health insurance companies. Medical waste is typically not malicious by an ordering provider, nevertheless, it takes away healthcare dollars should be used for testing that is medically necessary.
Unfortunately, there are many examples of fraudulent billing practices. One model involves a recruiter contacting Medicare beneficiaries, having a physician order a test, the lab processes the test, and reimbursement is submitted to Medicare for payment. In this scam, the recruiter (who may not even have a medical background) enrolls people for “free genetic testing”. Sometimes, people may even receive a gift card for participating such a program. Once a person is enrolled and a blood or saliva sample is obtained, the order is sent to a doctor. The physician in many instances does not even examine the patient. Still, they order the test and receive a financial kickback. One of the larger schemes taken down by the Department of Justice (DOJ) in 2019 involved 35 people charged with unlawful Medicare billing practices amounting to $2.1 billion. Other fraudulent practices have been reported in the mainstream media.
Ideally, it would be better to avoid fraud, abuse, and waste, rather than investigate and prosecute those involved in criminal activity. A solution that has been proposed is implementing a prior authorization system for specific tests. However, such regulations should not impede patient care or undermine a clinician’s judgement to order the right test for the right patient. If executed correctly, this could have a tremendous impact preventing fraudulent billing and waste within the healthcare system. It is important the OIG, CMS, payors, commercial labs, healthcare providers, and other regulatory agencies work together to have firm rules for billing policies and create barriers to mitigate fraudulent and wasteful practices within the genetic testing space.
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